Wema Bank PLC announces its audited 2016 financial results. Reports 18.48% growth in gross earnings driven by a 19.72% and 13.16%growth in both interest and non-interest income.
Managing Director/Chief Executive Officer’s Review
Speaking on the result, the MD/CEO, Segun Oloketuyi gave further insights into the performance of the Bank.
Without a doubt, 2016 was a challenging year given the spate of economic headwinds that impacted the economy and the banking industry, in particular. Despite the tough operating environment, Wema Bank recorded a double-digit growth in gross earnings, which rose 18.48% from N45.79 billion to N54.25 billion driven by an 18.61% and 13.61% increase in interest and non-interest income respectively. Overall, the Bank continued to benefit from its improving brand acceptance and market penetration. This flowed through to the bottom-line with profit after tax being 14.10% higher at N2.59 billion compared to N2.27 billion in 2015.
As a financial institution built on public trust, sound risk management practices remain at the core of our business model. The Bank was not immune from the impact of the economic slowdown and a more prudent approach was taken, in providing for some loans. We closed with a Non-Performing Loan (NPL) ratio of 5.07% from 2.67% in the prior year. In addition, our coverage ratio remains robust at 100% with Capital Adequacy Ratio (CAR) at 11.07%, which is above the regulatory minimum of 10%.
Funding remains at the core of the enterprise strategy; we reported an encouraging growth rate in our retail deposit volumes. We also intensified and contracted a couple of partnerships during the year which have contributed in good measure to customer acquisition.
Looking ahead, we remain committed to leading and defining how the use of technology shapes the banking landscape in Nigeria and indeed Africa, with the introduction of our *945# banking code amongst other innovative service offerings. It is in this light and in our bid to offer our customers the best of “all worlds”, that I am pleased to announce that Wema Bank would launch the first fully digital bank in Africa in the first half of 2017. With this launch, we believe that the banking landscape is set for a major disruption by Wema Bank, with our offer of simple, convenient and reliable banking experience to members of the public. The launch is intended to enhance our business model, improve efficiency and reduce our cost to serve.
We expect the vestiges of the headwinds in the economy to remain in 2017. However, we remain optimistic about the Bank’s performance as we leverage on the continued growth of our digital and physical footprints to grow our market share and improve our returns to all stakeholders.
Financial Performance Review
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| Income statement (N’bn) | 2016 FY | 2015 FY | (∆) |
| Gross Earnings | 54.25 | 45.79 | 18.48 |
| Interest Income | 44.45 | 37.13 | 19.72 |
| Non-interest income | 9.80 | 8.66 | 13.16 |
| Operating expense | 24.79 | 23.47 | 5.62 |
| Profit before Tax | 3.28 | 2.99 | 9.70 |
| Profit after Tax | 2.59 | 2.27 | 14.10 |
| Earnings Per Share | 7 kobo | 6 kobo | 16.66 |
| Balance Sheet (N’bn) | 2016 FY | 2015 FY | (∆) |
| Total Assets | 421.22 | 396.74 | 6.17 |
| Loans and Advances | 227.01 | 185.60 | 22.31 |
| Deposits | 320.76 | 284.98 | 12.56 |
| Shareholders’ Funds | 48.50 | 46.06 | 5.30 |
Highlights
- Gross earnings increased by 18.48% (Y-o-y) to N25 billion in 2016 from N45.79 billion in 2015.
- Profit before Tax (PBT) increased by 9.70% to N28 billion in 2016 from N2.99 billion in 2015.
- Profit after Tax (PAT) rose 14.10% to N59 billion in 2016 from N2.27 billion in 2015.
- Retail customer Deposit (savings) improved 42.79% (Y-o-y) to N0 billion from N34.4 billion due to increasing market share and brand acceptance.
Ratios
- Loan to Deposit Ratio: 70.77% (65.59% as at December 2015)
- Non-Performing Loans Ratio to 5.07% (2.67% as at December 2015)
- Liquidity Ratio: 30.30% (33.57% as at December 2015)
- NPL Coverage Ratio: 100% (120.92% as at December 2015)
- Capital Adequacy Ratio (CAR): 11.07% (15.10% as at December 2015)
Operational Achievements
- Strategic branch expansion continues; opened branches in Abuja, Edo, Lagos, Kogi and Niger State with on-going openings in view.
- Continued streamlining of our processes, ensuring improved turnaround time and service delivery for our customers.
